The question of “what does good employee tenure look like now?” has been asked by many of our clients lately, in the wake of a candidate short market, where candidates have been able to take the reins a bit more in terms of seeking roles with better remuneration, environment, and work-life balance. What we are finding is that in order to answer this question, we need to ask about retention as well, in terms of what companies are doing to retain employees.
Tenure and retention go hand in hand
There is no doubt that candidates nowadays are more aware of better options around them. With the rise of digital platforms and sharing of information, candidates are often flooded with new opportunities, which can make it all too tempting to jump ship when the going gets tough.
If candidates aren’t staying in their jobs, then ultimately, it’s because they haven’t liked their jobs or they haven’t yet found what they are looking for. What we need to establish as employers and recruiters are – what is this down to and is it a problem?
What does good employee tenure look like now?
Historically, employees that have remained in their current position for 3-4 years were the sweet spot. They showed enough commitment to their role to learn it thoroughly but also showed ambition to progress and continue their learning.
Now, after experiencing a global pandemic that resulted in closed borders, lockdowns and an extreme lack of talent flooding into the finance and technology markets, employee tenure seems to look a little different.
With available talent at a low for many markets, our clients (within the finance and technology space) are having to look outside their normal remit of what a ‘good’ candidate looks like because holding out for someone who has been in their previous roles for a solid 3 years each time hasn’t been possible.
There are lots of variables contributing to this idea of tenure. Two to mention here are the mix between the rise in millennials and Gen Z making up the vast majority of the employment market, and the changing expectations of employers.
The job market is currently still in a state where there are more jobs available than talent to fill these positions. This is a similar market to how the Gen Z candidates have been raised. There is always something else that seems better (better job) and flashier (someone willing to pay more) that diverts their attention.
Ultimately, this generation will be future customers, if not already, so they can play a big part in helping your organisation. They just need to be kept engaged.
Then we have the renewed expectations of employers. The pandemic and subsequent job market have shown people what is important to them and combined many candidates' personal and professional lives like never before.
The future of work is a more integrated personal and professional life, and companies are having to provide benefits that truly speak to their employees in order to retain them. Candidates want a job and organisation that allows them to be or grow into the best version of themselves.
What can we do as employers?
Having taken the time to understand the influences of retention, we can better understand what good tenure looks like, not just in terms of length of time but also the career progression that comes within that time. Seeing someone in an entry-level role for 4 years versus someone having been with the company for 3 years, progressing from a junior to associate, the latter is a much more positive story for the company and employee. The employee may not necessarily need promotions and position changes to experience career development but it is important that they are satisfied within their roles, responsibilities and training. These aspects of a role are mutually beneficial and are evermore demanded by candidates moving around the workforce.
Employers have made a great effort, with some still finding their feet in meeting employee demands. It isn't new but it's still a work in progress in terms of improving flexibility, work-life balance, culture & engagement, which may be why tenure is slowly on the rise again. Being able to acknowledge employees and their needs throughout employment is important in keeping with the times and maintaining valuable talent.
If you would like further advice on tenure and retention, please contact Chris Crolla or one of the team here. You can also refer to our tenure and retention articles on the Ambition blog page.
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